FreeTaxUSA VS TurboTax

Doing taxes is not everyone’s idea of fun — although it is necessary, many find it tempting to postpone because of the tedious process of figuring out forms and manual computations. While we do not think there is a way to do taxes in a more enjoyable way, there is promise of going through it easier without the help of a professional: a tax software. There are more than enough in the market to choose from, although they are not made equally and some edge out others in price, features and ease of use. Those three categories are our basis for reviewing two often mentioned programs available: FreeTaxUSA and TurboTax.


Background

FreeTaxUSA’s main draw is right on its name, “free”. The company is founded in 2001 by a team of software developers and a CPA. Today, it is owned by TaxHawk, Inc, which has other programs under its wing that helps with filing taxes. It is a member of the IRS Free File Alliance.

Meanwhile, TurboTax is a popular software among tax filers with a longer history, having been established all the way back in the 1980s. While initially under Chipsoft, it became an Intuit company after the latter acquired Chipsoft in 1993. Based in San Diego, TurboTax has been consistently rated as one of the best programs available for tax preparation.


Pricing and Discounts

A common complaint of those who prefer digital tax solutions is the high prices for softwares. With different budgets, what may be ideal for one is not the best for another.

Both of the services we are comparing today have free versions. FreeTaxUSA has it right on the name, but compared to TurboTax, being free is the software’s major selling point. While programs that have free versions offer 1040EZ at the very least, FreeTaxUSA has more by making different forms available for use, regardless of whether you are a property owner, a high-income earner, a contractor or a freelancer. There are of course added features for its deluxe version, and even then, it is not as steep as other alternatives at $6.99. Meanwhile, filing a state return will cost $12.95.

TurboTax has a free version too, but just as we have mentioned before, users who opt for this are only limited to basic forms. It is only advisable for those who only have W-2, 1099-INT or 1099-DIV income, who will claim the standard deduction, have child tax credits and possibly take Earned Income Tax Credit (EITC). When going for deluxe and upwards, the prices are already considered expensive especially when in comparison to competing programs (the price points change every now and then but the ceiling is at $179.99 currently). But then again, cheap is not always best. Military members can also avail of the discount available for them.

Winner: FreeTaxUSA bests TurboTax when it comes to pricing. Its free version offers more than that of TurboTax’s, and not everyone is willing to shell out TurboTax’s asking prices.


Features

FreeTaxUSA unleashes most of its features already with its basic edition, and most tools you will need for the forms it can accommodate are 100% free. The deluxe version has some additional features though in case you need more assistance with your tax filing. These include audit assist, priority customer support, live chat and an option to amend tax returns even when the form has already been submitted. Priority customer support means that you have direct access to its customer line, an option not available to free users who can resort to online forums and email support but may have to wait longer for a reply. With audit assist, a FreeTaxUSA specialist can help you go through the audit process.

TurboTax’s steep prices may be justified for the features it has on offer for a paying customer. It is rich in resources and help from professionals is not wanting. There are also options to easily import your W-2 and 1099 just by taking a photo (and this can be done on mobile too), follow guides throughout the process that make every detail right down to the tax return easy to understand, and access the program in different platforms, some of which can be downloaded with a click on its website. There are more features as you upgrade the type of software you are receiving, such as maximizing mortgage and property tax deductions, covering different types of investments, and availing of one-on-one professional help to guarantee that everything you’re filing is right.

Winner: TurboTax is a clear winner for its features. FreeTaxUSA is great but users must be more familiar with tax filing to make the most out of its free features.


Ease of use

With FreeTaxUSA, you are getting what you are paying for, or not paying for. The interface is pretty straightforward and well, non-fancy, although it has all the basic features you will need in doing your taxes as we have mentioned in the previous category. You can go step-by-step so that you deal with each possibly daunting information one at a time, but the tabs on the program can make you jump from one point to another without much difficulty.

TurboTax is often praised for its excellent user experience. The process is easy to understand especially to someone who has just started with tax filing, and customer support is an option just in case. There is a quick guide accessible on the screen that explains everything there is to fill out on your forms. TurboTax also syncs your data across your devices, including your mobile phone, and allows for uploading your data with a photo.

Winner: TurboTax not only has more features, it also has a user-friendly interface that would not put off newbies or those dealing with multiple documents at once.

Final verdict: The basics of tax filing are covered by FreeTaxUSA, but TurboTax takes it to the next level by offering more convenient features and a user-friendly interface to those who find doing taxes daunting.